Question

A sum of Rs. 550 was taken as loan. This is to be repaid in two equal annual instalments. If the rate of interest be 20% compounded annually, then the value of each instalment is ____________. *​

Answer 1

Let X = equal installment at the end of one year( rate% annually) .  

Now 1st year,  

P =550,  

Interest = PTR/100 = 550*0.2 = 110.  

Let X is to be paid as equal installment.  

Now, at the beginning of 2nd year,  

P =550 + 110 - X,  

Interest at the end of 2nd year,

= (660 - X) *0.2 = 132 -0.2X.  

Hence,total installment,

2X = 550 + 110 + 132 - 0.2X,  

2X + 0.2X = 792

X = 792/2.2 = 360.

So, Equal Installment = Rs. 360.

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Answer 2

Rs 350

the answer

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